FA says I can afford a 40% share but I dont think I can

catflapuk

Hey,

I am shocked! I am going through an application process for a shared ownership apartment and the Financial Advisor of the housing association (he is independent) says I can afford 40% and put down a 10% deposit. 10% equal £10,000 and I have savings of £13,000 which they know. The housing provider has not yet confirmed prices and has not commented on a minimum share, so I am a bit shocked that the FA is going to put me forward for a 40% share and thinks I can put down £10,000 with only £3,000 left for legal costs, moving etc. I have no furniture whatsoever, and I do not think £3,000 will be enough for that.

I phoned the HP and they could not give me a minimum share they'd want me to buy, but say it depends on what I can afford. What do i do if I think I cannot afford 40% although the FA says I can ?

I am a bit sad, because this is supposed to be affordable.

greenface

catflapuk wrote: »

Hey,
the Financial Advisor of the housing association (he is independent) says I can afford 40% .

Ding Ding Ding heres where i stopped reading. Get your own figures looked at dont ever listen to someone thats in their best intrest trying to sell you something . & think "worse case" when intrest rates rise and work is slack etc

martinsurrey

catflapuk wrote: »

Hey,

I am shocked! I am going through an application process for a shared ownership apartment and the Financial Advisor of the housing association (he is independent) says I can afford 40% and put down a 10% deposit. 10% equal £10,000 and I have savings of £13,000 which they know. The housing provider has not yet confirmed prices and has not commented on a minimum share, so I am a bit shocked that the FA is going to put me forward for a 40% share and thinks I can put down £10,000 with only £3,000 left for legal costs, moving etc. I have no furniture whatsoever, and I do not think £3,000 will be enough for that.

I phoned the HP and they could not give me a minimum share they'd want me to buy, but say it depends on what I can afford. What do i do if I think I cannot afford 40% although the FA says I can ?

I am a bit sad, because this is supposed to be affordable.

What is your income before tax?

What you would like to spend and what you can afford to spend are often 2 different things.

Afford, does not take into account any expensive hobbies or lifestyle choices you have.

Shared ownership properties are there to give people the leg up they need to get on the ladder, but only just enough of a leg up so they can manage.

The HA has X amount of money to help people, if it gives you a 25% share when you can afford a 40% share, they can help less people, they have difficult choices to make.

catflapuk

Ok. Thank you. So you say the FA is actually not independent because he works on behalf of the housing provider and wants to keep them as a client ? Man I was shocked. How can someone recommend putting down £10,000 for the deposit if you have £13,000 in savings only. Surely I dont need to be a FA to realise this is nonsense.

martinsurrey

catflapuk wrote: »

Ok. Thank you. So you say the FA is actually not independent because he works on behalf of the housing provider and wants to keep them as a client ? Man I was shocked. How can someone recommend putting down £10,000 for the deposit if you have £13,000 in savings only. Surely I dont need to be a FA to realise this is nonsense.

no, its not nonsense.

£10,000 deposit.
£600 legal fees
£1,000 mortgage fees (and you can get these free)
£50 to hire a van and self move (since you dont have any furniture)
£400 to furnish a house with second hand stuff untill you can afford new things (new is nice but not needed) - me and my other half did this with ebay stuff in our first house.

Total £12,050 leaving you £950 to have fun with.
or £1,950 if you get a fee free mortgage.

catflapuk

martinsurrey wrote: »

What is your income before tax?

What you would like to spend and what you can afford to spend are often 2 different things.

Afford, does not take into account any expensive hobbies or lifestyle choices you have.

Shared ownership properties are there to give people the leg up they need to get on the ladder, but only just enough of a leg up so they can manage.

The HA has X amount of money to help people, if it gives you a 25% share when you can afford a 40% share, they can help less people, they have difficult choices to make.

Understood. My income is about 34k, and I take home about 2,080 each month. I understand I need to buy the maximum share I can afford, but nobody can exactly predict how high legal costs will be in my case and in the financial assessment form they actually say I need to at least expect that to be £3,000. So that leaves me no money for moving, getting started (phone line, charges upfront etc) and furniture and 'other emergencies' - what if I become sick for two weeks, need to spend money on the dentist etc.

martinsurrey

catflapuk wrote: »

Understood. My income is about 34k, and I take home about 2,080 each month. I understand I need to buy the maximum share I can afford, but nobody can exactly predict how high legal costs will be in my case and in the financial assessment form they actually say I need to at least expect that to be £3,000. So that leaves me no money for moving, getting started (phone line, charges upfront etc) and furniture and 'other emergencies' - what if I become sick for two weeks, need to spend money on the dentist etc.

wow, so you can save, what, £1000 a month if your good, by the time the sale goes through thats £3k more (standard 3 months from offer to move in), and £3k legals, what planet are they/you on. A FTB buying an HA house will be under £1,000.

In short, I also think you can afford ATLEAST a 40% share.

catflapuk

My planet is called London and I can save £600 at the moment. I do not live with family, since I am actually not from the UK, so I am renting a room in a flatshare. I have not bought a flat before, so I am sorry I do not know how high legal fees would be. Excuse my incompetence. I appreciate advice but please do not insult me. In my home country people usually rent and I am not familiar with buying property.

Since I have no familiy in this country I have nobody to rely on. I have friends, but friends are not family and I need to make sure I can survive on my own. So, this is why I am worried but I accept that I may have to change my view.

Thanks

Angelicdevil

catflapuk wrote: »

My planet is called London and I can save £600 at the moment. I do not live with family, since I am actually not from the UK, so I am renting a room in a flatshare. I have not bought a flat before, so I am sorry I do not know how high legal fees would be. Excuse my incompetence. I appreciate advice but please do not insult me. In my home country people usually rent and I am not familiar with buying property.

Since I have no familiy in this country I have nobody to rely on. I have friends, but friends are not family and I need to make sure I can survive on my own. So, this is why I am worried but I accept that I may have to change my view.

Thanks

Don't apologise Most first time buyers feel like you.

With regards to solicitors fees, I bought a flat last year and they came to £1195. I was told to budget for around £1300.

Cycrow

catflapuk wrote: »

My planet is called London and I can save £600 at the moment. I do not live with family, since I am actually not from the UK, so I am renting a room in a flatshare. I have not bought a flat before, so I am sorry I do not know how high legal fees would be. Excuse my incompetence. I appreciate advice but please do not insult me. In my home country people usually rent and I am not familiar with buying property.

Since I have no familiy in this country I have nobody to rely on. I have friends, but friends are not family and I need to make sure I can survive on my own. So, this is why I am worried but I accept that I may have to change my view.

Thanks

what do you spend the rest of the £1400 on then ?
if your currently sharing rather than renting your own place, your rent and bills cant be that high.

i only earn about £1800 after tax, but renting a place of my own (not sharing) and i come out with about £600 spare each month

you really dont need much money for furniture, most of it you dont need to get straight away.

When i moved into an unfurnished place, they only thing i got straight away was the bed, the rest came later

kingstreet

Purchasing shared ownership is governed by the HCA, via the HomeBuy Agent for your area. In London, it's Metropolitan or First Steps/L&Q, but wherever it is, we all use the same shared ownership affordability calculator.

This tells the HA what share you can afford to purchase and just as it tells you how high you can go, it also says how low you can go too.

It might be worth asking the adviser to go through the HCA SO calculator with you to show you the recommended share. TBH our HA contacts ask us to let them have a copy of the completed calculator to confirm what is acceptable.

If this is a newbuild property and you are looking for more than 90%, you are going to find few lenders willing to lend and you probably will need a broker to help you with this. Have a look on the HCA HomeBuy Agent's website and find their list of approved mortgage brokers. Call a few of them and talk to them and get a feel for how they work and see if you want to work with them.